EVInvestments Worth ~USD 40 Billion Envisaged By 2030, Unfolding Multiple Real Estate Opportunities.

Gurugram, 11 December 2024: Around USD 40 billion of investments are envisaged over the next 5-6 years for the development of Electric Vehicles (EV) & ancillary industries in India. However, the deployment of these funds will rely upon successful implementation of government policies, charging infrastructure ramp-up and domestic manufacturing capacity scale-up. As per Colliers’ latest report “EVs in India: Renewed Vigour in Electric Mobility”, about two-thirds of the planned investments, can potentially materialize in the lithium-ion battery segment alone. Interestingly, despite slower than anticipated EV adoption, investment commitments in the EV industry rose over 3X times in the last 3 years. This in itself is a testament to the immense potential, which electric mobility holds in the country.

Share of planned investments for EV over the next 5-6 years

Type of Plants	Planned Investments (USD billion)	Percentage Share
Lithium-ion battery manufacturing	27.0	67%
OE and EV manufacturing	9.0	23%
Others	4.0	10%
Total	40.0	100%

Note: Others include investments associated with battery recycling and ancillaries
Investments are based on announcements made by individual companies across the EV landscape

EVs

Source: Colliers

The planned investments can potentially open up multiple real estate opportunities. It would accelerate land acquisition for setting up of EV and Original Equipment (OE) manufacturing units including lithium-ion batteries. At the same time, with an uptick in EV adoption, increasing need for charging infrastructure would potentially translate into real estate demand for more than 45 million sq ft by 2030.

Amidst slower than anticipated adoption levels, quantum growth in EV sales highly unlikely

With an overall EV penetration rate of 8% in India, Colliers estimates sales of around 2 million EVs in 2024. Although the pace of EV adoption in the country has been commendable, it has not been as brisk as anticipated. Given the tardy progress, especially when compared with the ambitious desire of having 80 million EVs on road by 2030, attainment of set targets looks far-fetched. Although a 6x growth in average annual EV sales (2025-30) is highly optimistic, an eventual realization of EV goals necessitates concentrated efforts in overhauling the EV landscape of the country.

Growth required in EV sales to achieve 2030 targets

Vehicle category	Current penetration levels (2024)	Targeted penetration levels (2030)		Estimated annual sales in 2024 (million)	Required average annual sales during 2025-30 (million)	Required growth in average annual sales
2-Wheelers	~6%	80%		1.2	7.3	6X
3-Wheelers	~55%	80%		0.7	4.3	6X
4-Wheelers	~3%	30%		0.1	0.9	9X
Heavy Vehicles	~3%	40%		0.01	0.04	4X
Total	~8%	30%		2.0	12.6	6X

Note: Penetration refers to share of EV registrations in overall vehicle registrations | 2024 data is estimated on basis of data till Oct 2024

Source: Ministry of Road Transport & Highways, Niti Aayog, Colliers, Industry

Factors such as significantly higher EV prices (compared to Internal Combustion Engine vehicles), import dependencies and inadequate public charging infrastructure have limited the EV adoption in the country. Thus, in addition to continued government impetus through subsidies and incentives, it becomes highly critical to significantly improve domestic EV manufacturing capabilities. Moreover, it is imperative to focus on lithium-ion battery & ancillary segments and public private partnerships in augmentation of charging infrastructure on highways, expressways and urban agglomerations across the country.

“Although the demand for EVs has picked up in recent years, the target of achieving 30% penetration by 2030 looks like an uphill task. While demand and supply incentives will continue to play a pivotal role in faster adoption of EVs, a multifold increase in EV sales can be fast-tracked by the reduction in production costs and improving affordability with respect to EV price points. Additionally, high-capacity original equipment manufacturing units and large-scale production of lithium-ion battery variants must be high on the EV priority list.” said Badal Yagnik, Chief Executive Officer, Colliers India.

Potential development of ~13,000 acres of land can materialize by 2030

With the rise in domestic production of EVs, about 13,000 acres of land acquisition and development plans can potentially materialize by 2030. Of the potential land development opportunities, more than 80% is likely to come from lithium-ion battery manufacturers.  This will provide a significant boost to the EV industry in the country and open multiple real estate opportunities. With growing demand, the industrial and warehousing segment is likely to benefit the most. The segment is likely to witness surge in built-to-suit developments curated for both global and domestic EV manufacturing firms. Technology adept warehouses and automation is likely to become more pervasive and accentuate integration across the EV value chain in India.

“Accelerated growth in the EV industry is bound to positively impact the Indian real estate sector. Supported by supply-side incentives from the government, leading developers are likely to increase their focus on state-of-the-art warehouses. Additionally, over 45 mn sq ft of real estate will be required for building extensive network of public charging stations over the next 5-6 years. Residential and commercial developers too are likely to increasingly integrate dedicated charging stations and parking spots for EVs within their projects. Such practices will provide a competitive edge, aligning with the requirements of corporate occupiers and homebuyers.” says Vimal Nadar, Senior Director and Head of Research, Colliers India. 

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